Many exciting things make up life as a newlywed, especially when you’re just coming back from the joys of the wedding and the holidays. You may be looking forward to settling into a new routine, while knowing that there are some plans you need to make together for the future.
While it may not be the first thing on your mind as a newlywed, creating a solid financial plan for your future should be high on your to-do list. Also, your financial plan should include contingency planning – and consider what could go wrong, even if it’s a disaster. In most cases, this means buying life insurance.
Five Life Insurance Questions Newlyweds Ask
Newlyweds, whether young or old, wealthy or just starting out, often have similar questions about their new marital status. So, let’s take a look at five FAQs that newlyweds have about life insurance.
- How much life insurance do we need?
- What kind of insurance do we need?
- Do we need life insurance if we don’t have children?
- Can we afford life insurance?
- What is life insurance?
How Much Life Insurance Do We Need?
Understanding how much life insurance you need for your new family life will depend on several important factors.
- First of all, it will depend on your financial situation. If you or your spouse were to die, what debts and responsibilities would you leave to your spouse? Making sure the premiums are covered is the first step in deciding how much life insurance you need. Your list may include your mortgage, car payments, student loans, credit cards or other personal debts.
- Next, you need to decide on the income that your partner depends on you bring home every year. Should the money be replaced if you die? Both parties should take this into account when purchasing their policies to protect others. Your daily spending should account for your monthly, yearly, and financial transactions.
- Finally, you may need to plan for the future with your life insurance. You and your spouse should consider your current or future financial needs (for example, children) and any retirement expenses you may have in the event of your spouse’s death.
For help coming up with a premium number, visit our life insurance calculator here.
What Kind of Life Insurance Do Newlyweds Need?
The type of life insurance you need as a newlywed depends on your budget and how much you need to do. You may need insurance to cover funeral expenses and living expenses when your spouse dies. However, you may also need to arrange additional financing.
You and your partner can choose different types of life insurance from different insurance companies to meet your unique needs. However, most can be described as long-term or permanent insurance.
- Time is life insurance that you buy for a short period of time. If you die during that time, your spouse (or other beneficiary) will receive an additional amount as a death benefit. Learn all about term insurance here.
- Eternal Life insurance does not expire at a certain point in time. It continues to cover you throughout your life, and not only does it provide a death benefit but it can also provide what is known as cash value. Although you may pay more for a permanent plan, there are cheaper options available, even for young, newly married couples. You can read more about permanent insurance here.
Do We Need Life Insurance If We Don’t Have Children?
A common reason for couples to have life insurance is to continue to provide for their children if their own income is no longer there. What if you don’t have children? Do you still need life insurance?
The answer is usually still yes. Let’s look at two examples.
No kids now, but maybe later?
- If you don’t have children now but may need them in the future, buying life insurance before children is still a good idea. For starters, life insurance rates are usually cheaper when you are younger. Therefore, getting a policy now can keep your rates low for a long time.
- In addition, the ability to purchase life insurance depends on whether you are in good health to obtain it. Buying a policy now ensures that if you have a future health event that makes you vulnerable, you will have dealt with that risk and are already covered.
No kids now… and maybe never.
- If children are not part of your plan, you still need life insurance to protect your spouse—until you and your spouse are financially secure and have enough money to meet all of your financial needs if one or both of you pass away. You may also want life insurance for any other family members who are dependent on you, or perhaps for charitable purposes.
Can We Afford Life Insurance?
The world of life insurance is vast, and there is a policy out there for everyone. Many families are surprised to learn that life insurance is cheaper than they think. According to a recent study, 8 out of 10 millionaires overpay for life insurance, many by 5x its actual value.
First, decide how much life insurance you think you need. So, if you can’t find a policy with a higher level in your budget, try starting small and increasing coverage over time. This statement is true. Others Life insurance is better than there is none.
How Is Life Insurance Used?
For newlyweds, life insurance is another way to show your partner how much you love and care for them. You are giving them a way to get on with their lives and take care of themselves and others if you die. The burden of grief is sufficient without the burden of financial hardship.
In addition, you can also use life insurance as a financial planning tool. By working with an insurance agent, you can create a life insurance policy that provides more than just a death benefit. If you’re looking for a permanent plan, life insurance can provide cash value, critical illness coverage, or even long-term care.
Getting caught up in the whirlwind of being married can be exciting but remembering to build a solid financial foundation will be a beneficial addition to your plans. Now is a good time to make sure you and your partner get all of your life insurance questions answered by speaking with an experienced agent. Additionally, we recommend this article if you have more questions about how to buy life insurance.
We wish the newlyweds all the best in your new life together!